Is My Man After My Money?

I inherited a sizable sum of money a few years ago. Now I'm worried my boyfriend is after it. Can I protect myself?

We at SmartMoney.com aren't in the habit of doling out romantic advice. Alas, we haven't the foggiest idea of how to avoid broken hearts. But broken bank accounts? On that front, we can help.

First up: As long as a boyfriend doesn't become a husband, there's little to worry about — at least from a legal standpoint. (And one doesn't have to be Dr. Phil to suggest that folks who are worried that their boyfriend or girlfriend will steal from them might want to rethink their relationship.) Just be sure to keep all bank accounts and other assets separate.

Should the relationship become more serious, however, things could get complicated. No matter what, when a couple get engaged, they need to sit down and talk about their finances — assuming they haven't done so already. This means discussing their spending habits, existing debt and each person's expectations of how premarital property will be treated, says Suzette Loh, a certified financial planner with New York-based accounting firm Eisner LLP. This is often particularly important for older couples — say, those 40 and over — who might have already amassed fairly significant retirement and brokerage accounts, as well as other assets.

Of course, while discussions are helpful, they won't protect you in a court of law. Laws vary greatly by state, but in most states, any assets (including an inheritance) that one spouse owns before entering the marriage remains the property of the individual — provided the money is never commingled with other bank accounts, says Charles Meyer, an attorney with Philadelphia-based law firm Fox Rothschild O'Brien & Frankel.

That said, once an individual commingles a separate account by investing in anything from property to a dining-room table, that portion of the money becomes shared property. "Once she contributes to the marriage, she says goodbye (to that money)," says Lynne Gold-Bikin, chair of the family law practice group at Philadelphia-based law firm Wolf Block Schorr and Solis-Cohen. Also, in many states, any income your original assets generate after you get married also becomes joint property. So if one spouse has a trust fund that earns, say, 6% a year, those earnings could be up for grabs should the relationship end in divorce.

Laws, of course, can be contested in court. The best way to protect yourself is to ask your significant other to sign a prenuptial agreement. This way, each partner knows what's protected — and what he or she stands to lose — should they decide to part ways.

Keep in mind, if you do opt for some sort of premarital agreement, you'll need to disclose all of your assets to your significant other. Both of you also need to be represented by a lawyer. Otherwise, the court could void the agreement.